– CGX/Frontera eyes 2nd well
– well one of the most exciting global prospects – CGX Co-Chair
The Kawa-1 well has officially been spudded in the Corentyne Block by Canadian company CGX Energy Incorporated and according to one CGX official, they will also be exercising their option drill a second well.
The Maersk Discoverer will be used by CGX for the second well
The news was shared by CGX’s co-venturer, Frontera Energy. In a statement, they revealed that Kawa-1 was spudded on Sunday. According to them, the well is expected to reach total depth by the first half of December. Additionally, CGX and Frontera will be drilling a second well using the Maersk Discoverer.
The statement quoted Frontera Chairman and CGX Co-Chairman Gabriel De Alba, who described the Kawa-1 well as one of the most exciting exploration wells in the world. He said a second well will be drilled offshore Guyana under similar terms and conditions.
“Today is an important day for Frontera and CGX as we continue to make substantial progress in realising the value of our investments in Guyana. The joint venture has spud the Kawa-1 well, which we believe is one of the most exciting exploration wells in the world. The joint venture has also exercised its option to drill a second well offshore Guyana under similar terms and conditions.”
“I am pleased with this major operational milestone for Frontera and CGX and appreciate the ongoing support of the Guyanese Government, our employees, and our other various partners as we work together to maximise benefits for all of our stakeholders,” De Alba said.
The Kawa-1 well, which is approximately 200 kilometres offshore Georgetown, is expected to de-risk multiple prospects in the Corentyne Block. Both the Corentyne and Demerara Blocks have been in CGX’s hand for some time without being drilled.
Last year November, CGX Energy had announced that the Government, following discussions on the drilling delays in the Corentyne oil block, had agreed to give CGX a one-year extension until November 27, 2021, by which time they are expected to commence drilling in the Corentyne Block.
Back in May 2019, the former Government had approved a Strategic Joint Venture between CGX Energy Inc and Frontera Energy Corporation to farm into two shallow-water offshore Petroleum Prospecting Licences for the Corentyne and Demerara Blocks – both of which are adjacent to ExxonMobil’s Stabroek Block, where multiple discoveries have been made.
The farm-in joint venture allowed Frontera to acquire a 33.333 per cent working interest in the two blocks. The agreement should have seen CGX’s Utakwaaka well in the Corentyne Block being drilled by November 27, 2019, with an additional exploration well being drilled by November 27, 2022.
In the Demerara Block, an exploration well was supposed to have been drilled by February 12, 2021, with a further exploration well being drilled by February 12, 2023. But with CGX not having started its drilling at the time, the Government had expressed concern over the situation. This is even as a number of new companies have expressed an interest in Guyana’s oil blocks.
Additionally, the company had also revealed its decision to relinquish 24.96 acres of land at the estuary of the Berbice River that was earmarked for its deep-water project, following negotiations with the Government of Guyana.
CGX and Frontera Energy had commissioned an independent report which had revealed that they are potentially sitting on 4.9 million Barrels of Oil Equivalent (BOE) in the Demerara and Corentyne, Guyana oil blocks under their control.
However, the report had hastened to add that there is no certainty that the company can recover the oil or that it is even commercially viable. According to the report, there are a total of 32 prospects in the two blocks, inclusive of 27 in the Corentyne Block and five in the Demerara Block.
These prospects potentially have 4.940 million BOE un-risked and 884 million BOE in them. An un-risked prospect, however, is one where the volume of oil is predicted on the basis that everything goes as planned and the oil is commercially viable and recoverable. The report makes it clear that it cannot give such certainty.
